FARGO -- Republican legislative leaders are a bit more gloomy about North Dakota’s revenue prospects than those built into Gov. Jack Dalyrmple’s recommendations for the 2017-19 budget.
After Dalrymple presented his budget plan last week, the House and Senate majority leaders announced they would not automatically accept the revenue forecast in the budget, but likely would instead craft their own, more cautious prediction in light of slumping oil and farm commodity prices.
In shaping his budget proposal, Dalrymple asked departments to submit requests for the 2017-19 budget that were 10 percent lower than the current budget. The governor said another $60 million in spending reductions were identified beyond the 10 percent target.
Agencies had to accept cutbacks, called allotments, for the current budget. Dalrymple is recommending $13.48 billion in total spending, including a general fund budget of $4.78 billion, a 21 percent reduction from current spending.
Senate Majority Leader Rich Wardner, R-Dickinson, and House Majority Leader Al Carlson, R-Fargo, both said they are more cautious after revenue collections dropped sharply, falling below estimates that had been revised downward for the current budget.
“Things went south on us a lot faster and a lot further than we expected,” Wardner said. “We’re a little bit more cautious this time, because we don’t like to live with allotments.”
Wardner and Carlson said they were skeptical that oil prices would reach levels predicted in Dalrymple’s budget proposal, with a North Dakota price of $51 per barrel, Wardner said.
“The key thing is to err on the side of being conservative,” Carlson said. “You can always go up, but it’s hard to go down.”
In addition to being wary of the revenue forecast, the legislative leaders said the governor’s budget recommendations also borrow a lot from special funds. “There’s a lot of money that moved in that budget,” Carlson said.
Dalrymple, who recently met with The Forum Editorial Board, shrugged off the leaders’ reluctance to embrace the revenue forecast in his final budget recommendation. He noted that it’s not the first time his budget proposals have received a cool reception.
“It happens almost every time,” said Dalrymple, who leaves office Thursday, Dec. 15, to be replaced by fellow Republican Doug Burgum, a Fargo businessman. “They like to act like the governor’s budget proposal is totally meaningless.”
The North Dakota Constitution and statutory law call for the governor to make budget recommendations, he said. “Whatever games they might try won’t change that.”
Carlson agreed that it has become “pretty normal” for legislative leaders to balk at executive revenue predictions, and repeated his earlier criticism of forecasts by Moody’s Analytics, used by the state Office of Management and Budget.
For the 2017-19 budget, Carlson said, legislators likely will embrace a zero-based budgeting process, which Burgum has endorsed, instead of using the last budget as the starting point. “We’re still going to have the governor’s proposal,” he added, referring to Dalrymple’s recommendations.
“We’ll do our due diligence like we always do,” Carlson said.